Nov 24, 2021

CEO comments on the Q3 Release – “The Future of Hybrid work is positive for us”

During the third quarter of 2021, most countries in our focus markets still had restrictions where homework was recommended, but this is now beginning to ease.

Read Full Q3 Report here (Swedish)

During the third quarter of 2021, most countries in our focus markets still had restrictions where homework was recommended, but this is now beginning to ease.

In Sweden and Norway, companies have reopened their offices, but many large companies are planning to return to the offices only at the beginning of 2022. In the USA, there are large differences between the states, but in general they are a few months behind Sweden. The UK has opened offices but both companies and employees are a bit hesitant as the spread of infection is now increasing again.

We see a strong connection between the demand for our solutions and how much society has opened up after the pandemic. In recent times, inquiries have increased mainly from Sweden, Norway, and the USA. What is most often requested are solutions to support the new hybrid way of working.

Many surveys are published around the world, and we also read in the Swedish media, that companies are starting to switch to the new hybrid way of working, where staff can continue to work 2 to 3 days a week from home. This is expected to drive the need for digital solutions for planning the work week in the office with colleagues, booking work and parking spaces as well as solutions for measuring how much and in what way the offices are used. Many companies have already started planning for the rebuilding of the offices for more collaboration and creative work as well as fewer individual workplaces for individual work. Since staff are expected to spend less time in the office, there will be potential for companies to reduce their office space and thus save money. Flowscape has one of the market's strongest offerings to support this transition.

Net sales for the quarter ended at the same level as the same quarter last year, but the share of recurring income is higher. Current income amounted to SEK 1.3 million / month during the quarter, which is the same level as the previous quarter. Unfortunately, we lost a major customer contract during the quarter, a contract we had since 2016. The customer made a global decision to have a solution in all their offices and then the Swedish organization had to adapt. This meant that our SaaS revenues did not increase during the quarter, despite many new transactions.

Cash flow for the third quarter was negative and landed at SEK -1.6 million, which was mainly due to one of our major customers changing its financial routines and failing to pay invoices on time. At the end of the quarter, we had a stock of unpaid overdue invoices of SEK 1.5 million. Cash flow is still under control and the goal of a positive cash flow for the full year remains.

Operating costs have not changed significantly this quarter compared to the previous two quarters in 2021. This is fully in line with our strategy of being cautious about costs as long as the effects of the pandemic on the office market are negative.

We are convinced that the future hybrid approach is positive for us, and we are now expanding our investments in marketing and sales capacity with increased intensity during the rest of 2021 and 2022.

CEO, Peter Reigo